Chinese Credit Card Profitability Model Discussed

As a major E-pay method in the future, credit card plays an important role in promoting security in payment with more convenience. In last few years, credit card grew quickly and banks used various ways to improve their market share, yet because difference in concept, imperfection of laws and immature management system, our credit card is still in the babyhood moment compare to other countries, and the very profitable operation in foreign countries may suffer a loss overall in our country. So effective management of cost and income has become an emergent problem to our banks.This paper was divided into five parts. SectionⅠintroduces the background and the meaning of studying the operating mode of China credit card, summarizing that China credit card are in a dilemma overall. SectionⅡintroduces theory about credit and other things related to credit card. SectionⅢstudies operating mode of the most successful and mature country in credit card-USA, and took MBNA & American Express as examples of two representative operating modes. SectionⅣstudies every item of cost and income about China credit card, and took a middle bank with china commercial bank to interpret such state. Finally, in SectionⅤ, we conclude everything above, and give my suggestions to the development of China credit card.